Bryan Caplan  

Bill Dickens versus the Signaling Model of Education

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Bill Dickens was my Econ 1 teacher.  He's also long been one of the intellectual consciences on my shoulder - an imagined reader whose standards I strive to meet.  He recently emailed me a critique of a thesis for which I plan a book-length defense - the signaling model of education.  Bill kindly gave me permission to reprint it in its entirety for EconLog.  I'll soon be posting a critique, followed by Bill's rejoinder.


I take it that you think that nearly all of the value of schooling is signaling? I used to take that view too, but the accumulation of evidence that I've seen leads me to believe that isn't the case.

For one thing I find it very hard to believe that we would waste so many resources on a nearly unproductive enterprise. There are plenty of entrepreneurs out there trying to make money by selling cheaper, in time and money, versions of education and they aren't very successful. Mainstream schools have experimented with programmed learning, lectures on video, self-paced learning, etc. and none of the methods have caught on. Why wouldn't they if they worked?

Of course its hard to believe that reading novels and poems contributes much to ones productivity on the job. So how do I square curriculum content with my view that education is productive? Here goes:

1. Education isn't mainly about learning specific subject matter. Rather education is mainly about practicing the sort of self-discipline that is necessary to be productive in a modern work environment. High school allows you to practice showing up on time and doing what you are told. College allows you to practice and work out techniques that work for you that allow you to take on and complete on time complicated multi-part tasks in an environment where you have considerable freedom about how you spend your time. Some people may be more talented than others at this sort of thing (you come to mind as someone who is particularly talented at self-discipline), but this is also an acquired skill that one can develop with practice, and everyone needs to develop certain work habits that make one more productive at both types of tasks.

2. Education is a consumption good. This should be self explanatory. At the margin school may be work, but infra-marginally at least some (if not most) people actually enjoy the reading, the lectures, the homework, etc.

3. Education is not just investment in work capital, its also an investment in consumption capital and social capital. I feel much more at home in the world due to the fact I understand certain cultural references. For example I know what someone means when they refer to someone else as a Prufrock. I also understand what someone is saying about a character in a music video if their costume invokes the evil robot Maria from Metropolis. I learned those things in college. The shared culture produced by the education experience expands our common language with a lot of meaning, and that produces huge network externalities. Knowing history does help me do my job, but it is much more important that it allows me to make analogies that will be understood by acquaintances. What good
does it do to talk about Vietnam Syndrome with those who didn't live through that era if they don't know anything about the Vietnam war and its effects on our politics? What good does it do to denigrate McCarthyism if people don't know what that is? Obviously this list could go on and on. "The original position," "fair game," "zero-sum game," "categorical imperative" etc. etc. All very commonly used expressions whose meanings would probably be completely lost on someone who had three years of trade school after grade school and then went straight to work. But anyone who attended college has probably been exposed to those ideas through conversation if not through attending classes.

4. Some classes are very very valuable at work. Reading, writing and numeracy are all obviously important. Most people may learn those things in grade school, but a lot of people are still advancing in HS. If you do powerpoint presentations for English you are learning skills you may very well use later on the job. Math courses have big returns even controlling for IQ (I believe) and that would seem to indicate that they have value preparing people for a wide range of work. Its not just engineers who use math on the job these days. Many blue collar workers are programming numerically controlled machine tools and have to understand statistical quality control.

In short, I think you are way off track on your thinking on education. -- Bill


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COMMENTS (38 to date)
liberty writes:

I'm with Bill.

Phil writes:

I think Bill's points are so weak that he pretty much makes Brian's point for him.

Did Bryan hire Bill to throw a few softballs? :)

Kevin Driscoll writes:

I'm with Bryan.

I'll be a senior Physics major starting tomorrow and I still haven't learned what I need for the job market. My entire undergraduate degree is just signaling to graduate school (which is basically a job if you're a physicist because you teach and do research) that I like physics and I can handle the workload.

Dan Weber writes:

Can you separate education into three categories? So it's a consumption good, an investment good, and a signaling good, in some combination.

Jayson Virissimo writes:

I think the consumption component of education is at least as big as the signaling component.

Zac Gochenour writes:

Part 1) reminds me of Tyler Cowen's view of education http://www.marginalrevolution.com/marginalrevolution/2006/02/why_education_i.html although not exactly the same. I think there's a fair amount of truth to it, but I think people get far more education than this would suggest.

2) I'd guess fewer than 1 in 20 students enjoy schoolwork, based on my experience, and that's being surrounded by people who were at least moderately successful in school. Maybe I really underestimate people. Sure seems like people spent a lot of time complaining.

3) This might be true in some jobs, particularly for the very highly educated. It is probably true for Bill and the people he has worked with. It is certainly what a lot of liberal arts educators *say* the purpose of education is. But for the vast majority of workers, even college educated workers, I really doubt this means much. I worked for a few years (granted, in engineering) with a bunch of college graduates, many with advanced degrees, and I can guarantee no one remembered Prufrock or knew what the categorical imperative was. People made analogies to sports and television and spent their time talking about cars and hardwood flooring.

4) Is true for a lot of elementary ed and maybe even some high school, but it doesn't explain at all why most people go to college. And even if some small fraction of blue collar workers need to understand statistical quality control, no reason this couldn't be learned on the job - most jobs really don't require much math beyond arithmetic.

GU writes:
All very commonly used expressions whose meanings would probably be completely lost on someone who had three years of trade school after grade school and then went straight to work. But anyone who attended college has probably been exposed to those ideas through conversation if not through attending classes.

I'd wager that a shocking number of college graduates would not be familiar with phrases like "original position" or "zero-sum game." The desire to be an intellectual of some sort does not reside in most people, even most college graduates. When all your friends are academics, intelligent lawyers & physicians, and other intellectual types, it is easy to forget that most people, even those who are of above average intelligence, don't care about Metropolis and its critique of modern society, and the like.

David Friedman writes:

The problem with his argument 1 is that one could learn, and demonstrate, the same skills while being productive, working as some sort of apprentice at a real job.

The problem with argument 3 is that you can learn those things, at much lower cost, by reading books and talking with people.

Doc Merlin writes:

@David Friedman

Does being mostly an autodidact in your field make you see college as more signaling than it would be if you worked in the field you were externally trained for?

Gaspard writes:

"There are plenty of entrepreneurs out there trying to make money by selling cheaper, in time and money, versions of [cigars-perfume-champagne] and they aren't very successful."

I think Bryan planted a stooge in the audience.

Doug Rogers writes:

One thing that has gone without mention here is that regardless of one's position, the degree to which either the human capital or signaling theories of education are "correct" is always a matter of degree. If 90% of what is taught has no effect on productivity, and thus wages, the signaling theory explains 90% of the issue. I think a more useful debate is whether this percent should be higher or lower and not over which theory is correct or incorrect in some misleading dichotomous manner.


Bill wrote:
"Mainstream schools have experimented with programmed learning, lectures on video, self-paced learning, etc. and none of the methods have caught on. Why wouldn't they if they worked?"

These methods do not work because they are not costly signals and thus do not create separating equilibriums. The signaling theory of education is based on the assumption that the signal is sufficiently difficult for certain agent types send (i.e. the lazy/unintelligent). This assumption is independent of whether or not formal education effects productivity.

Most his Bill's arguments are non-responsive in similar ways.

z writes:

I don't find Bill's particular arguments persuasive, but here are some others that argue for his position that education is not just signaling:

1. Perhaps students are getting smarter anyway and, by going to college, they are just waiting until they are smarter to enter the job market.

It seems clear that children have substantial cognitive development during the years of their early education. Is there any reason to expect that this stops at age 18?

Perhaps keeping your brain engaged with various exercises (regardless of their purpose) helps speed development, but it may also simply be the time delay that matters.

2. College may have very different benefits for those at the top and those at the bottom.

It seems clear that top students get very little out of high school, for example, but students at the bottom seem to gain much in terms of the skills that the rest of us take for granted: showing up on time, working hard, being respectful of others, etc. These are all requirements for being successful at work.

I can imagine that college is similar: the top students do not get much out of it, but those at the bottom -- who probably have to push themselves much harder -- gain more in the indirect benefits that Bill mentions.

Hence, if someone were to try to measure the impact of education, it may involve substantial non-signaling benefits for those on the margin but be pure signaling for those at the top.

wlu2009 writes:

"1. Perhaps students are getting smarter anyway and, by going to college, they are just waiting until they are smarter to enter the job market."

If this were the case, why would students and society spend so many valuable resources on college? Why not just wait four years, read books, and play thought provoking games or do the crossword? Unless college itself is providing a real benefit or acting as a signal, no reason to pay the tuition.

andy writes:
I can imagine that college is similar: the top students do not get much out of it, but those at the bottom
It seems to me that the reverse may be true; actually the top students can leverage the contacts, they come across interesting projects, they come across people willing to help them. For the bottom students it seems to me it is actually signalling only. And looking and the Stossel's series, the signal don't seem to be worth it.
Mercer writes:

" an environment where you have considerable freedom about how you spend your time. "

This could make sense for people who work at home alone but most people work in an office or other environment with other workers.

Some college is consumption. Some people spend a lot of money and get deep in debt for said consumption. Why is this a good thing?

" The original position," "fair game," "zero-sum game," "categorical imperative" etc. etc. All very commonly used expressions whose meanings would probably be completely lost on someone who had three years of trade school after grade school and then went straight to work"

These are not common expressions for college graduates I know. Most Americans, including college grads, use sports and Hollywood for their cultural references. Robert Byrd was the last politician who quoted Shakespeare.

Steve Sailer writes:

I would also add that education helps you play at pretend jobs and find out what you like. MBA school is particularly good for this.

Don't get fancy. Formal schooling is largely an artifact of organized violence (the State).

K-12 schooling is compulsory. E.G. West argues that compulsory attendance laws empower rent-seeking by public-sector employees and other contractors to the system.

Post-secondary credential requirements allow businesses to discriminate against people whom anti-discrimination laws would otherwise protect.

Kevin Driscoll writes:

@ Dan Weber I think this is exactly Bryan's position. He doesn't argue that ALL of college or education is signaling, just that signaling is the dominant factor. Everyone agrees that it is probably a combination.

@ GU I think you are exactly right. Among my friends, only those that are majoring in fields where "zero-sum games" and the "original position" (we spent about 2 weeks on the second one in my ethics class) are important could tell you what they are. Students at my university are much more likely to pick up cultural words like "slam-piece" (a derogatory term for women) than intellectual ones.


I think that University "meet and greet" / "networking opportunities" are very good examples of signaling in action. A company comes to your school and potential job seekers rush to meet with the representatives. They don't talk about the student's individual achievements, they mostly make small talk and take resumes. This could be accomplished much more cheaply over the internet and if all that mattered was the University you attended and what's on your resume then this would be fine. However, companies acknowledge that degrees and resumes are mostly signaling that they can take as a prerequisite for consideration. They actually have to go to the school and interview to find good candidates for their positions.

Philo writes:

(1) Signaling is not "a nearly unproductive enterprise." Signaling is communicating important information. Self-instruction loses out in competition with formal schooling because it fails *as signaling*. (2) "High school allows you to practice showing up on time and doing what you are told. College allows you to practice and work out techniques that work for you that allow you to take on and complete on time complicated multi-part tasks in an environment where you have considerable freedom about how you spend your time." The former is especially important. But completing high school also constitutes a *signal* that you can show up on time and do what you are told. Generating the signal is more important than producing the disposition itself, which (in any case) many people have innately. (3) "[T]he shared culture produced by the education experience expands our common language with a lot of meaning, and that produces huge network externalities." I'd want to see some measurement of that "huge"; I doubt that the common-cultural effects produced by formal education are very important in practice. (4) "Reading, writing and numeracy are all obviously important." That takes us through third grade. If formal schooling doesn't convey those skills within three or four years (and for many pupils it doesn't), it's time to try some other method.

Peter writes:

I hate to say this but in every non-science professional field I have worked in a degree pretty much signals useless empowered princess who is more trouble than they are worth. Spent the last ten years hiring only folk that have loads of experience or no degree, no certifications, no experience and am much happier .. both are similar in that they take direction and you don't have to spent five years unlearning what they were wrongly taught.

GU writes:
(4) "Reading, writing and numeracy are all obviously important." That takes us through third grade. If formal schooling doesn't convey those skills within three or four years (and for many pupils it doesn't), it's time to try some other method.

No. I can grant the numeracy point if by that term all one means is arithmetic (but it certainly doesn't hold if it includes algebra, geometry, calculus, statistics, etc.). But improving one's writing is a life-long process. Even the most gifted writers go through many drafts, at least if we're talking about books, scholarly articles, professional memorandums, and other serious writing. And most will say they improve as writers the more they write. The idea that one could learn all he or she needs to know about writing by third grade is absurd. Sure, most people never write (important) things for others, but even peons have to write emails at work these days.

Moreover, the idea that one could learn all she needs to know about reading after three or four years of primary schooling is similarly laughable. I won't bore the readers by detailing why this is true.

To state the painfully obvious, rejection of the idea that all necessary education should be completed by the third grade is not mutually exclusive with the theory that collegiate education is wasted on most people.

Foobarista writes:

In some areas, college does provide a sort of "dry run" for industry work, as SS and a couple others have said. This is particularly true in relatively "nonacademic" fields like computer science, where you're either a programmer or you're not, but you won't know until you are forced to write a decently large program. (This is also why I don't like team projects in college; far too often, team projects are done by one or two people with skills and the other "team members" go along for the ride.)

Since the college "signal" is mostly about individual ability, excessive "teamwork" is probably not a good thing.

David Friedman writes:

"But improving one's writing is a life-long process."

I agree. But I'm not sure that college (or high school) courses play a large role in that process.

...

"Moreover, the idea that one could learn all she needs to know about reading after three or four years of primary schooling is similarly laughable."

Again, I agree--but one learns to read mostly by reading, not by taking English courses.

David Friedman writes:
Doc Merlin writes:

@David Friedman

Does being mostly an autodidact in your field make you see college as more signaling than it would be if you worked in the field you were externally trained for?

I think a successful autodidact provides evidence that the training function of college is less important than many suppose. In my case, it isn't just being an economist and law professor without formal training, it's also being a successful writer and speaker with very little training in either skill.

I'm not, at this point, arguing for the "mostly signaling" claim, I'm arguing against specific arguments on the other side. I'm sure college does provide some people with useful training, most obviously people in fields such as science and math. But I'm not at all sure that that holds for the bulk of college students.

Glen writes:

As someone generally sympathetic to the signaling model, I'd like Bryan to explain why he assumes that all or most educational signaling is inefficient. In a world of costly information, a separating equilibrium can be efficient. Of course, signaling is inefficient if there exists a lower-cost means of providing the same information -- but that's not obviously the case, given that higher education signals qualities other than IQ. In addition, the costs of educational signaling must be discounted by the degree to which they have other benefits.

Without having considered the systematic evidence, I offer an alternative hypothesis based on my experience working at a publicly funded university: that college once provided a relatively efficient separating equilibrium, and the subsidization of higher education over the last half-century has largely been an attempt to replace the separating equilibrium with a (less efficient because non-informative) pooling equilibrium -- for egalitarian reasons. The attempt has only been partially successful, because GPA and brand name still allow some differentiation.

Steve Sailer writes:

As it gets harder for employers to fire people due to wrongful termination lawsuits, discrimination lawsuits, and the rest, it gets harder for employers to hire them. Employers want evidence that potential employees are hard-working, amenable, intelligent, acculturated, and so forth, since they could be stuck with them a long time.

There are a handful of industries where everybody starts at the bottom, most famously being a Hollywood agent, where super-ambitious Mike Ovitz-types start in the mailroom and are expected to figure out some way to hustle themselves up the ladder. But they are more protected against termination lawsuits by the You'll Never Work in This Town Again ethos.

David J. Balan writes:

Here's a possible test. Among Israeli Jews there is a substantial religious minority known as "Ultra-Orthodox" or "Haredi" Jews. In this group a large fraction of the adult men neither go to the army nor to work, instead they spend most of their lives in yeshivot studying religious texts. They usually receive little or no secular education. Because of the poverty that this causes, which is exacerbated by large families, a relatively small number of Haredi men are starting to seek vocational training and going out to work. This number may or may not grow significantly, depending on how various intra- and inter-communal political battles play out.

These yeshiva students have definitely been trained in self-discipline; yeshivot have much much more demanding schedules than regular schools. And the study of the religious texts, particularly the Talmud, involves a certain amount of what, stretching the term a bit, could be called logical reasoning (though most definitely *not* rationalism), so they have a relatively high level of cognitive training and literacy.

So here's the question for Bryan. If these guys do ever decide to enter the work force in large numbers, how do you think they'll do? If education is all about signaling, then it seems like they should do pretty well: they can demonstrate having done difficult deeds, just like someone who got into and out of a selective college. Moreover, to the extent that what school actually teaches you is merely basic reasoning and literacy, they get a fair amount of it, which also suggests that they should do OK. If, on the other hand, secular education actually teaches you something beyond how to read and do certain narrow cognitive tasks, they should have a lot of trouble.

What do you think will happen? Does your answer depend on how many of them enter the workforce at once (maybe there are niches that a relatively small number of them could successfully work in, but not enough to employ a very large number of people with that background)? There may even be a bet in here somewhere.

David J. Balan writes:

BTW, in your answer assume that they are able to get some modest amount of vocational training before they go out to work.

andy writes:

@David J. Balan: Isn't your question based on the assumption that if you forbid a 'secular' student to go to college, his 'usability' to the potential employer when he turns 24 would be the same as the 'usability' of the haredi jews?

Tracy W writes:

GU, on the topic of reading, writing and English, there's some fascinating results from cognitive sicence, as summarised by Dan Willingham that for long-term retention in mathematics, it's necessary to practice something repetitively for years. In his books "Why do students hate school?" he has this fascinating graph of students' retention of algebra, based on time after the last maths course they took, and how many more maths courses they took. Students who had only taken one algebra course forgot it quickly after the end of the course - students who got As forgot as quickly as those who had gotten Cs (so after 6 months, the A students still remembered more than the C students, but both had forgotten half of what they learned before). People who went on to take maths courses beyond calculus didn't show any forgetting of their algebra, even 50 years after their last maths course.

So part of the value of school, beyond the first 3 years, is practising long enough for the basics to be engrained into long-term memory. Learning new stuff while practicising the basic skills makes the practice less tedious, and helps any students who will be using the new stuff as well.

Robert Johnson writes:

Didn't anyone here study computer science or engineering?

Prof. Caplan, do you concede that it's possible that some kinds of education can directly add to a person's productivity on the job?

AMcguinn writes:

Quite bizarre. Of those who go to university, how many learn about Eliot and Vietnam and Kant there? I'm not sure which is more unlikely, that someone would learn all that at university, or that an intelligent person who did not go to university would somehow not learn it.

GU writes:

@Tracy W

Your post supports my earlier post, but your tone seems to be antagonistic towards me. Did you confuse me for another poster? Or did I misread the tone?

Alex writes:

Those same Jews also abstain from the workforce for those years in Israel, living off of welfare. That also explains their poor wage outcomes. The point is to be involved in a tight knit sub set of Jewish society that provides social services while the cost of entering in foregone income is so high that shirkers don't enter, thus maintaining the financial viability of the social service organization. RADICAL, RELIGIOUS, AND VIOLENT by Eli Berman explains this excellently.

Troy Camplin writes:

Ph.D. in the Humanities
M.A. in English
B.A. in Recombinant Gene Technology, minors in Chemistry and English

Job: hotel night auditor

Clearly my signaling sucks.

Or, what am I signaling?

Tracy W writes:

GU, I don't feel any antagonism towards you, my apologies for writing in such a way that gave that impression. All I intended to do was to point out some interesting research that's relevant to the question of how much schooling students should have.

GU writes:

@Tracy W

It appears I misread your post. Thanks for clearing that up!

Rebecca writes:

@Troy: You are signalling your inability to make good choices, and your excessive stubbornness in not changing course once you realize your mistake.

I know that sounds harsh, but in this job market the skills you learned aren't obviously useful. With some work you could show how the skills you be productive for an employer, but that would require creativity and drive, not to mention be an uphill battle.

[And just for the record, my social sciences PhD is proving primarily valuable for the (luckily extensive) statistics skills I learned....there is a substantial surplus of PhDs in all fields that needs to be addressed, but that is a discussion for another day.]

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